required to spend $2.33 per hour for these covered employees whereas smaller employers, those in the 20 to 99 range are required to spend $1.55 per hour on health care for their employers. i guess finally i would say just in the spirit of an overview, principally we see that employers make health care expenditures in a few different ways, we think of three general categories, the largest of those categories and i think the preferred route is that employers provide health insurance to their employees. we collect data on an annual basis from employers about how they're making these expenditure sos we know the vast majority of expenditures toward this requirement are made toward health insurance, approximately 90%. the next sort of category of expenditures as has been alluded to earlier, a number of employers contribute directly to the city option which

affords their workers reduced fee or free enrollment in healthy san francisco program or for those who are not eligible for healthy san francisco, a medical reimbursement account and we see that approximately 3% of all the expenditures under the employer spending requirement go toward that city option and then finally the third sort of category or bucket are these reimbursement program that is are typically administered by third parttys on behalf of employers and we see that in the range of 6 or 7% of the overall health care spending goes into those health reimbursement sketches and those are then accessed by employees to be refunded for any out of pocket medical expense that is they occur. >> and i know at the board of supervisors as some of my colleagues remember, there was i guess a little bit of a difference of opinion if you will among friends in terming of how to deal with health

reimbursement accounts. i'm wondering if you can taug a little bit about what has happened around health reimbursement accounts, there were many of us who at the time we were trying to close this loophole who were saying, listen, the federal government will eventually see these accounts for what they are and probably will not allow them to exist which is why we wanted to close the loophole, i wonder if you can talk a little bit about that. >> by way of additional background, our office is required by the health care security ordinance to collect data from the employer community on an annual basis, every year we collect that data and analyze it and we saw in saw over time that the amount of money that was being contributed to these health reimbursement accounts was going a large amount of that money was going unused by employees, that was sort of one data element that fed into a policy discussion here at the

board and the mayor's office that led to an amendment to the ordinance so the practices around health reimbursement accounts have changed in some respects commencing in 2012. >> how are health reimbursement accounts treated under the aca? >> recent federal guidance has come out to indicate that initially stand alone health reimbursement accounts and this is the practice here in san francisco in particular, these accounts are not coupled with health insurance coverage but they're provided on their own to employees. the latest guidance from the federal government indicate that is those health reimbursement accounts are going to be imper message under the health care act under violation of the larger principle that the affordable health care act has eliminated the use of any health care programs that have lifetime or annual caps, and stand alone

health reimbursement accounts by their definition have annual caps on the benefits and as such, it's been widely understood and interpreted following this most recent federal guidance that these will be impermissible commencing in 2014. >> i think for many of us, that's a good thing. now, if maybe for purposes of informing us, i know that when the debate around the loophole was happening, there was a different approach that was taken, as you know, i introduced legislation which mayor lee vetoed and there was sort of a revised legislation that was introduced and eventually passed and one of the things i want to ask you, and i remember that this was a key component of that legislation, and i will sort of read to you something that was includes, something that the mayor said at the time and the passage of the version of the legislation that was passed and was signed and he said, we must

know what proportion of companies, however small, are placing these unfair restrictions on their employee, hra's, if we find after collecting statistically significant data samples that there are more than just a handful of employers who are unduly restricting employee hra's, i will work with the board of supervisors to place additional regulations governing hra's. did we collect the data to know whether or not restrictions were placed by employers? >> yeah, we certainly did, supervisor campos. the amendment, the ordinance was passed in november of 2011. i think the may yoirl executive directive calling on us to give that direction was called shortly thereafter, so early in

2012 when we commenced [inaudible] how they complied with the ordinance in 2011, for the first time, we leaked data about health reimbursement accounts and specifically whether and how those accounts were being restricted. and the data that we then reported based on the 2011 practices showed that 53% of employers who administered these health reimbursement accounts had imposed one or more restrictions on them, and by restrictions, what i mean here is the employees who had these accounts were prevented from using them for certain particular types of medical expenses. >> so, that i understand, so before the law was passed by the mayor and the board in 2011, the percentage in terms of employers who placed restrictions was what, 53? >> 53% >> and what happened the year after? >> we're now in the process, we collected the data that was submitted to us earlier this

year, we'll shortly be releasing our annual analysis of that but we have a preliminary look at the date that was provided to us from 2012 and the number hasn't changed, essentially 53% of employers continue to report that they place 1 restrictions on their health reimbursement accounts. >> so, no change even after passage of that? >> no change even after passage. i would point out that there was some understanding at the time of passage that the board's hands were tied and as a result there was nothing in the ordinance that specifically was tattered at trying to reduce those estruses. i think there was some belief or hope in various communities and circles that that practice would maybe decline over time, but again, with this first year where we have now comparative data across 2011, 2012, it continues to be more than half

restrict, we can drill down and show that there are major categories of restrictions and i think there was particular interest in the percentage of employers who would restrict their use for health insurance swes for enrollment in healthy san francisco because if you're an employee who receives a health reimbursement account from an employer in lieu of health insurance, it would be expected or common that you might utilize those funds to purchase health insurance on the private market or enroll yourself in a healthy san francisco program, i think that's more likely to be true after 2014 when individuals have a legal mandate to provide that insurance and the rates we see 35% of these health reimbursement accounts precluded or prevented employees from using the funds to purchase health insurance and 28% of them precluded individuals from using the funds to enroll in healthy san francisco, the rates have

stayed exactly the same, in 2011 and 2012 with respect to those specific restrictions as well. >> and i think those of us who were not supportive o*f the amendment as it passed really believed that it wasn't enough to really make things change, it seems like in that sense, we have been provender to be rightfinger but i do want to acknowledge that there were efforts on the part of the business community, i know the golden gate restaurants association did a lot of work to make sure that those numbers were lowered and i know that a lot of information to its members, but it hasn't -- >> i would be remiss if i didn't also mention while the rates of restrictions have stayed consist tents, we have seen an up tick on the utilization of these utilization accounts, people have been reimbursed in a higher pe sen taj due to a lot

of outreach from both the business community, other members in the community. >> so, now that hra's are not allowed under the aca, then what happens in terms of, you know, compliance with the health and security ordinance, what ways do employers have? >> yeah, i certainly expect and there's all indications that there's a lot of robust policy discussions about this and any potential changes but for the time being, or pending any changes, i think our expectation or our understanding is commencing in 2014, again, no with standing the possibility of changes at the federal or local level, employers would simply provide health insurance or contribute to the city option, those would be the two principle methods of complying with our local spending requirement. >> i see. so, talking about the 53% of employers who place restrictions on these accounts, then we're talking abthese

folks now going the route of insurance or healthy san francisco? >> yes, going the health insurance or contributing to the city option, the contribution tos the city option as has been indicated previously, the pool and the size of the healthy san francisco problem, excuse me, the healthy san francisco program is likely to be reduced and consequently, the contributions that employers make to the city option will be routed to medical reimbursement accounts that are administered by the city for individual employees, these are similar to frankly the health reimbursement accounts that are used widely today and administered privately, there are some difference, one of those which i think you're getting to is that the medical reimbursement accounts administered by the city have no prescribers other than them being available broadly for medical services. >> you said earlier, i want to

get the number right, that about 35% of employers that use these hra's have not allowed in this past year that the money be used for health insurance? >> that is correct. >> if that money is now going to be used in healthy san francisco let's say, will healthy san francisco place restrictions on the use of that money? i would imagine that we are not going to prohibit people from using that to buy health insurance? >> that sounds unlikely. i would be reluctant to speculate but i can say there's no such restrictions on the administration of those accounts currently or over the five or six years they've been maintaining those accounts forward. er >> i think that's a great thing, you have more people using that money for health insurance. in terms of the medical

reimbursement accounts, is there anything that we need to do in terms of clarity that we need to get from the federal government around how that works? >> in all honesty, i'm not sure the details of that, and i don't know if other departments are looking into that, but for the time being, my understanding is absent any changes, you know, that those will continue to operate as they do even after 2014 under the hca. >> okay, colleagues, any other questions? great. just a quick question for the department of public health. i remember, you know, a number of conversations we had with director garcia and all the health professionals, from my perspective, it looks like more people will be able to buy health insurance. i assume that from the department of public health, that's a good thing? >> that is absolutely a good

thing and we've said while healthy san francisco is a fantastic program, it is limited by its nature and health insurance is always better than healthy san francisco. >> that's great. >> i have a couple of questions for colleen, i *f i'm sorry i missed the present tais and i'm waiting on the handouts, i may ask questions that you may have already addressed. when i look at healthy san francisco, i know people in the baby community that would qualify for healthy sf, but don't know about the problem, and so where i'm concerned with that is if people don't know about healthy san francisco, it's been on the market and out there for a bit of time, how are you going to do a better job of doing outreach and enrolling people in the affordable health care act that of which we'll be able to do in the fall? >> so, our first method of enrolling people is to look at who we have on healthy san

francisco, as you said, there's a gap between your residents and healthy san francisco participants, we're looking specifically at converting the healthy san francisco participants into health care coverage. we recently applied for an outreach and education grant which we were not successful in getting probably because we have too much outreach to our population already, we identified in the process of applying for that grant, we identified certain populations in our city that need extra attention in outreach and the southeast core door, in addition to asian and latino adult, small business and sole proprietors and young adults in school, so we intend to do a concerted outreach effort in the absence of the grant to those specific populations that we know will need outreach. >> this is exactly what i'm concerned about, about -- you understand there's a need for

extra attention to outreach, at least i haven't heard and i haven't seen a plan on what exactly outreach is going to look like. i'm thinking we need to develop a system that is more or less similar to the census, remember when there was census data that bewere collecting, people that were cultural competent and it was an economic engine, it helped go door to door and get people to fill out their census form. so, i would like to see something similar like that, so that would require the department of public health doing some kind of partnering with cover california when it comes to finding monies available to make such an effort come into a reality, or folding into the department of public health budget as well, there are grass roots organizations organizing right now in the latino as well as

chinese communities that need extra help, meaning financial support, on their outreach, but before we can do outreach, it's a level of education that needs to happen and there are resources that need to be developed and quite frankly purchased and paid for to get out there, so i don't know if your presentation discussed about this but this is something that i'm really sensitive ant because we don't have the opportunity, we are talking about people's lives here to allow this gap that -- to exist. there are a lot of people that now qualify for health care, for coverage. we need to make sure we are capturing every single person, every family that's out there and in this universe and getting them enrolled and i think the department of public health is going to need more health than just relying on their public clinic partners and allies, we need to be

enrolling the non-profiteer and is the housing authority, they're always left off the table and i think we also need to be organizing with our churches and i already said our non-profits, so that is really my position. supervisor campos? >> i wanted to add something to that, supervisor. one of the thing eswith os we are plan tog do is hold a series of hearings and the next hearing we're planning to hold which i would love to work with you is on this issue of what is our plan for enrolling people into the exchange, what kind of outreach, and my hope is that between now and the time we hold a hearing in september because the enrollment begins in october that we will get from the department of department health a robust plan for outreach. >> i'm feeling an incredible sense of urgency, it's still going to need some money and some resources and i don't know where those are going to come

from. non-profit is already stressed and probably don't have accessed money and a budget to do this kind of work, but why not hire some of the people to go door to door and knock and have them begin to do some peer to peer education. >> so, i have a couple of responses to that. first, we are working on a citywide communications plan and work witching the mayor's office on outreach and education plan for the city, we are planning to apply for the second round of funding with the same application that we had previously, with the some computations we had previously. in addition, we -- just this week, the department pulled together all of its community based organization contractors and in that discussion with them, we talked about the health reform implementation and the importance to get everybody covered on health insurance for which they're eligible. we asked them to consider being

a sister, application enrollment as sisters under the cal foreign yo program because that does come with money, for everybody who is enrolled with california, any person who's enrolled into covered california, they get 58 dollars, for every person you enroll, that's 58 dollars, so it could help support the enrollment. >> that sounds like the triple c bounty program, and again, i don't want to drop the ball on this because i would be really upset. if i get upset, i'm going to put a bug on campos's ear, and it will be contagious and you have a whole board of upset supervisors, so in your partnership with the mayor's office, loop us in, particularly those that are your partners that are working and representing the communities that are often left off the table.

this is absolutely critical. thank you. >> yes. >> believe you me, it's a lot worse when you see supervisor cohen upset. i think the point though, one point that i will make and we talked earlier about the convening of the universal health care council which is a good thing, if it's so important, it's too bad that it's only happening three months before the implementation, and another point i think, it's like i wish we had had this discussion before adopting the budget of the department of public health, of the health services agency because to the extent that more resources would have been needed, that was the time to have that conversation. >> one thing i neglected to mention to you is that cover california is also kind of running to keep up and there aren't resources available right now to even train application as sisters, so we're in a little bit of an education only place, we can't move to action until they move forward as well.

>> thank you very much, i know we want to get to public comment, i have one question or one point that i think is important to clarify and if i may, i'd like to ask our deputy city attorney, john gibner who's here with us, there has been a lot of talk from a lot of different folks, you know, about the legality of the health care ordinance and whether or not it's preempted by federal law and as our legal council for both the board of supervisors, the mayor and the department of public health, can you say something about that, what's the city attorney's view on that? >> sure, deputy city attorney, john gibner. the affordable care act has -- includes some language that states that it does not pre-empt local and state laws like the health care security

ordinance. in termser of other questions that have arisen, based on the federal guidance we've received to date, there's no indication that the health care security ordinance is preempted or otherwise adversely affected by the affordable care act and as you subjecting earlier, supervisor campos, the local law complements in many ways the affordable care act. >> thank you, i just want the hear it from the horse's mouth, if you will, because i want to make sure that everything's on the table. yes, supervisor cohen? >> thank you very much, so what does reetcher -- pre-empt mean, just to be clear? >> basically under the u.s. constitution, federal law is supreme and in many cases, if a

local agency or a state adopts a law that directly conflicts with a federal law, the federal law trumps, in other situations, there's a federal law that occupies the entire field of an area and when the federal government adopts the law that occupies an entire field, congress may say local jurisdiction, you can't meddle with this subject, in this case, the affordable care act allows local jurisdictions like san francisco to adopt ordinances like the health care ordinance. >> thank you for that clarification. >> thank you very much, why don't we go on to public comment and we have a large number of people here, so normally i give each speaker which is the maximum which is 3 minutes, but i don't want to lose our quorum, so we will limit to 2 minutes, so why

don't i read off a few names. (calling speaker names). >> good afternoon. i'm ken jacobs, i'm the chair of the uc berkeley labor and education and one of the co-principle investigators for the simulation of market and is the primary model being used for projections in how health coverage will change in california as a result of the affordable care act and has been used by state, counties and covered california for their planning purposes. i was also a member of the universal health care council. >> is it possible to ask speakers to use the other

podium and if i may ask you to maybe line up to your right, my left, my apology, thank you very much. >> no problem. >> so, it's helpful to put the health care security ordinance in context. when it was caoe aided in san francisco, we were in the midst of a downward trend in job base coverage in california and in the u.s. as a whole. the security ordinance along with the healthy san francisco partners was also preserved to help job base coverage in san francisco in the context of workers having greater access to public programs, a study found that as a result of the program, 29% of covered employers reported that they added new health offerings, 27% increased employer insurance contributions, 18% contributed to healthy san francisco and 14% contributed to hra's and that goes against the broader

trend of what we see in job base coverage in the united states and california. there's no question the affordable care act is going to -- that significantly expands options for health care in san francisco, but as noted earlier, there will be a large number of remaining uninsured, we estimate 3 to 4 million remaining uninsured statewide about which a million will be undocumented and 800 thousand will not have an option of coverage, looking in the bay area, we estimate of the working population that will remain uninsured, roughly half -- >> mr. jacobs, 's, i'd like to ask you the finish what you were saying because i think the information you're talking about is very important. i just want to make sure we have that information. *frjts so, half will not be eligible for affordable care act program and is if we look at those who are eligible for healthy sarn fra*ns, that goes down to a little over about 43%

will not be eligible for programs, so if i can just quickly finishing up, for those who will be eligible for the program, and it's important to say this is a big expansion and for many people, the cost of coverage through covered california will be much less than they would pay today and for a much better plan but it will still be costly for many. for a full time worker earning $15 an hour, 30 thousand dollars a year, they would still pay 200 dla, a month for a health care plan with a 2 thousand dollar deductible and 45 dlarp co-pay, the take up of covered california of the subsidy population, would be 20 to 44% in 2014 rising by 2019, so the result is we still will have a large residual uninsured population in the state and in

san francisco. there will still be insignificant need for the safety net system and the health care security ordinance can continue to play an important role both in shoring up health care coverage so we don't see a shift into public programs and through the public option to make sure people have the resources they need to be able to get coverage and to participate in coverage. er >> thank you, next speaker. >> mr. chair, honorable supervisors, the health of san francisco and the affordable care act, many people are left out of the affordable care act. we need to defend healthy san francisco now, more than ever, many immigrants are completely ineligible for health coverage through covered california, the h health care exchange, they depend on healthy san francisco for their health care.

that includes tens of thousands of san francisco resident, 10 thousand more that work in san francisco but do not live in san francisco, san francisco has been a huge success, all it takes to perceive for the future is to get the obama administration to recognize that it's a unique program and make some regulatory allowances unique for its design, this should not be controversial, healthy san francisco has a [inaudible] for healthy care reform and our national representative ares at the forefront of making the aca as strong as they could, but during this, we will ensure the health of san francisco remain a model for others to follow and doesn't allow us to